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Section 147 of the Income-tax Act, 1961 [Corresponding to section 34 of the Indian Income-tax Act, 1922] - Income escaping assessment - Illustration - Assessment year 1939-40 - Assessee was carrying on business in Chhota Nagpur, a partially excluded area - After completion of assessment for assessment year 1939-40, ITO issued reassessment notice under section 34 of 1922 Act on 10-7-1941 and made reassessment on 31-3-1944 - Whether in view of decision of federal court in Chatturam v. CIT [1947] 15 ITR 302, revised assessment made on 31-3-1944 was valid having regard to fact that Bihar Regulation IV of 1942 had been made with retrospective effect and, therefore, notice issued under section 34 of 1922 Act was validly issued - Held, yes FACTS The assessee which was a private limited company, carried on business in Chota nagpur, a partially excluded area. The ITO made assessment for the year 1939-40 on 25-8-1939. Subsequently, on 10-7-1941 the ITO issued notice under section 34 of the 1922 Act on the ground that the income had partly escaped assessment and, accordingly, made reassessment on 31-3-1944. On appeal, the AAC upheld the reassessment. The Tribunal also held that the revised assessment made on 31-3-1944, was validly made having regard to the fact that the Bihar Regulation IV of 1942, which brought into force the Indian finance Act, 1939 in chota nagpur with effect from 30-3-1939, been made with retrospective effect and thus, the notice under section 34 issued on 10-7-1941, was validly issued for the assessment of the year 1939-40. HELD In view of decision of Federal Court in Chhatturam v. CIT[1947] 15 ITR 302 it was manifest that the revised assessment made on 31-3-1944 was validly made having regard to the fact that the Bihar Regulation IV of 1942 had been made with retrospective effect and the notice under section 34 of 1922 Act issued on 10-7-1941, was validly issued for the assessment of the year 1939-40. Note: The case was decided against the assessee. CASE REVIEW Chatturam v. CIT[1947] 15 ITR 302followed and relied upon. CASES REFERRED TO Chatturam v. CIT [1947] 15 ITR 302 (FC). Baldeo Sahay and R.J. Bahadur for the Applicant. S.N. Dutt for the…

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